Variety selection 2016: Efficient varieties fighting low prices

The cereal price situation is demanding even better performing and cost-saving varieties. Only: No variety encompasses all the advantages. Therefore the crop cultivation businesses must weigh up and calculate the pros and cons.

While the raw material revenues seem to have bottomed out globally, agricultural products in particular, however, must reckon with another difficult year: On the one hand, it is clear that for the fourth consecutive time there will globally be a high yield.

Fig. 1: Global cereal balance

On the other hand, cereal usage for fodder and ethanol production will probably stagnate for a further year as a result of the Asian crisis and the low oil prices (Fig. 1, on basis of IGC). With the falling producer prices, the costs per unit have to decrease, cost-neutral performance enhancers have priority, and resistance becomes more important as do quality characteristics. Variety selection in autumn 2016 must reflect these premises.

Which variety properties count in autumn 2016?

Tab. 1 describes exemplary a standard site with high-yield expectations, how the variety selection affects the earnings:

The first column describes the leeway which is possible within the current performance level during variety selection, expressed as the cereal growth stages (APS) of the Bundessortenamt. Here, the grain yield and protein content only differ by one grade. Greater leeway is present in the agronomical properties.

Tab 1: Economic assessment of variety characteristics

The second column assesses the relevance of this characteristic. Here, one grain yield grade represents a 4 % difference, therefore 3.6 dt/ha in this example. The risks for low-protein and fall rate stable wheat varieties are a quality markdown per decitonne in the range of 0.60 to 1.00 Euro. Winterkill refers to breaking and reseeding. Particularly resistant or lodging-resistant varieties allow saving in treatments.

The emergence frequency (third column) is estimated individually for every farm. Here it is implied that one APS leads to more protein (approx. 0.3 % on average) every third year which maintains the quality premium, unlike APS 4. Similarly, in sprouting resistant varieties, it is assumed that in the fourth year the price markdown to the fodder wheat level for lodging-resistant varieties will be saved. During winterkill, damage by breaking occurs for example every eighth year. Healthier varieties allow savings in fungicides in many years, but not in every year.

Resistance and quality are now heavy weights

Under the described assumptions, the earning potential of the variety is by far the most important characteristic of that variety. The following applies: The higher the expected yield level, then the higher the economic advantage of the yield in comparison to the other variety characteristics. The lower the price expectation, then the more important are the cost-reducing variety characteristics such as winter hardiness, lodging resistance and health. And naturally reliability of the marketing quality, because the quality markdown hurts twice as much at a low-price level.

With almost 50 €/ha profit difference, spike health and winter-hardiness are the second most important variety characteristics. Particularly with these characteristics it must be mentioned that the selection of a variety is always an individual, company decision. Because in the north of Germany the economic relevance of Fusarium susceptibility is not as high, while in the west and south it is the winterkill rating.

Added to this, no variety encompasses all the advantages; the advantage of one characteristic is often brought into perspective by the disadvantage of another.

And in the end, the flexibility of use of a variety is not evaluated in the table. One such variety with a healthy base can also be used as a wheat on wheat crop; a variety with Fusarium resistance also in maize crop rotations; a variety with the best lodging resistance also in slurry handling farms with a high lodging risk.

Hybrid rye is now even better value?

Tab 2: Profitability of hybrid rye depeding on the site and producer price

Hybrids are gaining ever more importance, even in cereal cultivation. Hybrid rye has largely established itself, however population rye is still grown on 30 % of the area. This can’t be tolerated any longer; earnings are being thrown away here! Because with turbo-hybrids, varieties are now available which are 5-10 more productive than the previously distributed hybrid rye varieties. The yield difference compared with population varieties is therefore 18-20 % on typical rye sites. With this in mind, a profitability estimate is presented in Tab. 2. Calculated with the present hybrid rye varieties, even the sites with very low yields and with revenues of 12 €/dt can therefore make a surplus profit of 46 €/ha.

Hybrid wheat is good for stressful sites

Tab 3: Profitability of hybrid wheat depending on the site and producer price

The variety range of hybrid winter wheat is also increasing. This year alone there were two new approvals; throughout Europe there are already 200,000 hectares planted with hybrid wheat. However, with the self-pollinator wheat, as is also the case with barley, the yield advantage of hybrids is discussed in different ways. A clear yield advantage of hybrid wheat is seen under stress conditions, where its higher physiological activity, particularly in the roots, is in demand. This is primarily required in heavy soils, drought stress or as wheat after wheat crops. Under such difficult crop preconditions the yield of hybrid wheat drops to a lesser extent and thereby gains in excellence. This is illustrated in Tab. 3: the lower the yield expectation, the higher the cost-adjusted advantage of hybrid wheat.

At low prices (15 €/ha) hybrid wheat is economically interesting at a yield expectation of 75 dt/ha, and at high prices (25 dt/ha) with 90 dt/ha. However, unlike hybrid rye, the limits are not fixed. This is because the decision to use hybrid wheat also depends on an adjusted system, in which the development of the individual plants takes priority right from the start. The farms here have different preconditions with regard to accessibility, plant cultivation flair, and even the sowing technology.